A Minnesota appeals court revived the Medtronic shareholders' lawsuit against the company's merger with Covidien, according to a MedCity News report.
Here are five key notes:
1. Shareholder Lewis Merestein sued the company in Hennepin County District Court claiming Medtronic's planned conversion of company stock to the combined company would lead to a loss for Medtronic shareholders. Medtronic planned to pay $93.22 per share for Covidien, converting the right for $35.19 in cash and 0.956 in Medtronic shares to Covidien stockholders.
2. The planned transaction would leave Coviden stockholders with around 30 percent stake in Medtronic. The stockholders would then be forced to pay taxes on Medtronic stock gains, but the sale didn't generate cash for the stockholders to pay the taxes, according to the report.
3. The complaint filed stated Medtronic stockholders for 12 months or more could see 15 percent to 30 percent federal tax rates on the gain.
4. The Minnesota Appeals Court ruled the lower court shouldn't have tossed all but one of the claims on Mr. Merestein's original lawsuit.
5. Medtronic will likely appeal the decision to the Minnesota Supreme Court, according to the report.